SapuraKencana Petroleum Berhad (SDRL) & Seadrill Limited sign MOU to integrate their tender rig businesses.
The new and restructured tender rig business will mark a new phase of cooperation between the two companies. The enlarged tender rig business under SapuraKencana will comprise, 16 tender rigs in operation (including the KM1 rig currently owned by SapuraKencana), 5 of which are already 51%-owned and managed through its existing joint-venture with Seadrill in Varia Perdana Sdn Bhd and Tioman Drilling Company Sdn Bhd, and an additional 5 units currently under construction, 3 of which will be acquired through this transaction and are expected to be delivered in 2013
In addition SapuraKencana will also be offered the right to be the manager for three further tender rigs which are not part of the transaction. These rigs, West Vencedor, T-15 and T-16, are today either owned or planned to be owned by Seadrill Partners LLC and are therefore not included in the transaction.
The operating rigs and the new-builds are all currently contracted under long-term fixed price contracts with companies such as Chevron, Shell, PTTEP, and Petronas Carigali. The total order backlog amounts to USD 1.55 billion as of end of October 2012. The majority of the operating rigs are currently deployed in Southeast Asian waters. Of the 15 operating rigs, 9 are barges and 6 are semi-tenders, which are capable of operating in water depths of up to 6,500 feet.
The MOU further stipulates that the parties will seek to grow their joint venture activities in Brazil where they were awarded 3 PLSV contracts by Petrobras in 2011. The parties also agree to establish a joint venture between Seadrill's 40 % owned subsidiary Archer Limited and SapuraKencana. The scope of such venture will be to focus on developing and expanding Archer Limited's wireline services in the Far East Asian markets.
